1/04/2017

Headline January 04, 2017/ ''' EMPLOYMENT & *EMPLOYEES* '''

''' EMPLOYMENT & *EMPLOYEES* '''

MULTI-BILLIONAIRE FARAZ -at the hosts Pakistan- could just so easily make it, as one of country's richest lads. No matter, what the measure.

He just about shares and participates, in every economic pie. And then To top it all, - and the reason he makes it to the Headline Post on !WOW!, is the sterling fact that the Good Lord, in his infinite mercy and wisdom, could not have blessed a finer human with such riches.

Faraz and his associates, over these many years, have given away over 37 fully paid scholarships to students of Pakistan. The details of these scholarships will soon be published in Sam Daily Times.

But the introduction doesn't end here. When I meet him next, I am going to reason and persuade him for ever more scholarships and also for some international ones for the Students of Chad, Somalia, Afghanistan, SiriLanka and Bangladesh. So, standby.

WHAT IS AN EMPLOYEE? Since last year judges in several American courts are grappling with this very profound question.

Most notably, some drivers for Uber, -at the time- an app-based taxi service, went on to sue to have themselves declared employees, rather than independent contractors, in a bid to gain more rights.

With technology making it ever easier to farm out small tasks, and freelancing on the rise, the traditional definition of employment may eventually break down.

Yet the importance of the ''employee'' label -and the benefits that come with it is very often overstated.

Historically, the challenge for economists has been to explain employment rather than contracting

Firms with employees use plans and hierarchies to get things done.; those who use contractors rely on markets and prices instead.

In 1937, Ronald Coase, an economist, argued that this comes down to transaction costs. For instance, it is difficult to contract on output when it is tough to judge quality [as with say a spreadsheet].

When transaction costs are high, it may be better to replace contractors with employees, who are paid for their input rather than outputs.

A corollary to Coase's theory is that when transaction costs are low, there is no need for a firm.

Industries in which tasks can be neatly divided and when output is easily tracked, such as building, haulage and logging, contractors have been prevalent for decades.

In 2009, the year Uber was founded, 88% of taxi drivers were already contractors.

Contracting then, is not new. But campaigners for workers' rights worry about the use of contractors in the rapidly growing app economy. Often, governments and companies provide benefits exclusively to employees. Are contractors missing out?

In the Developed World The main benefits associated with employment fall into three broad categories:

.- public pensions

.- health care

.- unemployment insurance.

In the case of pensions, governments usually levy payroll taxes on firms in proportion to their workforce, and use the proceeds to support pensioners.

Hire a worker as a contractor, and firms need not pay the levy; in America the self-employed must instead pay it themselves . Workers' advocate claim this means contractor face higher face higher tax rates than employees.

However, conventional economics say the burden of tax cannot be altered to just by changing which party writes the cheque.